Globally the effect of increased GHG (greenhouse gas) emissions is leading to climate change. The Paris Agreement of 2015 set an international framework for the reduction of greenhouse gas emissions from the year 2020, requiring developed and developing countries alike to form policies for greenhouse gas emissions. It is deemed important for there to be a widespread commitment including private companies to accomplish the 2°C target - keeping the increase in average global temperature to less than 2°C above pre-industrial levels.

Every single employee of Nihon M&A Center Group behaves as a corporate citizen recognizing that engagement with environmental issues is a social duty and it is incumbent upon them to act in all fields of work with consideration to the environment, including reduction in greenhouse gas emissions, mitigating and adapting to climate change.

Furthermore, in its daily work the Group endeavors to reduce burdens on the environment by encouraging the reduction of waste, low energy consumption and saving resources, whilst taking into account the risks that climate change poses on the business environment.

Identifying and responding to climate change risks

This is a summary of identified climate related risks and responses by the Nihon M&A Center Group

Types of risks		Time horizons of risks happening	Anticipated risks and countermeasures
Transition risks toward a low-carbon society	Policy / Regulation risks	Mid-term (4-10yrs)	Increase in prices relating to greenhouse gas emissions If Carbon Tax and/or Emission Trading Scheme are/is introduced in the future, there is a risk that costs of energy use will increase. In case these new policies are introduced, the Company needs to calculate the degree of impact on profitability, so it started calculating and monitoring the amount of CO2 emissions since FY2019. The Company will broaden the scope of its calculations gradually and assess the level of impact as well as consider the business plan.
	Policy / Regulation risks	Mid-term (4-10yrs)	Tightening of obligations to report greenhouse gas emissions The Group is currently not subject to reporting obligations determined by the Japanese government as well as any local governments to report greenhouse gas emissions and reduction plans, hence the Group is not affected. Going forward, if there is an expansion of the scope of reporting obligations or a newly created energy-saving policy, additional costs may be incurred with regard to our operational improvement and facility introduction, depending on the degree of the obligations.
	Market risks	Mid-term (4-10yrs)	Changes in behavior of our clients There is a risk that our clients, suppliers and investors may prefer other, more sustainable companies due to changes in their behavior caused by growing interest in the risks posed by climate change, the spread of ESG-related investment and recognition of SDGs. At the Company, the IR Department is promoting our ESG-related initiatives as the main department in charge.
	Reputation risks	Short-term (-3yrs)	Increase in concerns or negative feedback from our stakeholders There is a risk that our societal reputation may be damaged if the request from clients, investors and society on climate change issues progress rapidly and our responses are delayed or we lack appropriate information disclosure. At the Company, the IR Department is promoting our ESG-related initiatives as the main department in charge. The Company has selected several companies as references for ESG-related initiatives and compared/evaluated our initiatives with the reference companies, in line with the evaluation framework of several ESG evaluation companies; if the Company’s initiatives are inferior to others or the Company believes further improvement is required, the Company reports to its management to discuss future measures to take to deal with the situation.
Physical risks associated with climate change	Acute risks	Short-term (-3yrs)	Increase in and exacerbation of extreme weather events such as cyclones and floods The Group operates seven offices in Japan and five offices abroad and around 90% of our total employees are based in Japan. There is a risk that our operations may be suspended if we suffer a breakdown/cutoff in transportation infrastructure connecting our business locations and clients/partners or information infrastructure, due to any extreme weather event in Japan such as typhoons, floods or heavy rain and thunderstorms caused by global warming. In addition, as our business operation is labor intensive, a reduction in the number of days worked due to the events described above may lead to the risk of our labor expenses-to-sales ratio increasing. As our countermeasures against these risks, the Group is promoting the strengthening of our system infrastructure so that even if our business locations are hit by a disaster, it will not lead to an effective shutdown of our functions. In addition, Nihon M&A Center is also endeavoring to reduce the risks during disasters by establishing a structure that allows all employees to telework during emergencies and conduct remote meetings and due diligence with clients. At all of its offices, the Group has disaster stockpile items at hand and we periodically conducts evacuation drills. Any intensification of natural disasters has the possibility to cause damage to the local economy. The Company has experience of flexibly establishing satellite offices throughout the country during emergencies. Through this experience, the Company can develop furtherlocalized business activities and speedily grasp the needs of potential clients that desire M&A.
	Chronic risks	Long-term (11yrs-)	Rise in average temperatures and sea level There is a risk that costs may increase from a drop in productivity caused by more frequent heat strokes and/or from much use of air conditioning, due to a rise in average temperatures. There is also a risk of flooding due to a rise in sea level. In the ASEAN region, there is a risk of frequent flood damage due to extreme heat and prolongation of the rainy season caused by global warming.

Measures to mitigate climate change

As one way to reduce greenhouse gas emissions we are working to reduce our levels of electricity consumption.
We promote the so-called Cool Biz and Warm Biz initiatives in Japan to set air conditioning temperatures at a certain high level in the summer months and also at a certain low level in the winter months. This is one form of engagement for saving energy consumption, which also includes varying specific settings of air conditioning in different workspaces, powering down non-essential equipment and generally raising awareness about environmental matters among our employees.

Methods for adapting to climate change

Starting with protection from general flood damage, the Nihon M&A Center Group continuously takes action to minimise the impact on the business with systems to back up the server and to preserve important data in the cloud. We aim to minimise any risk of physical damage that our business might otherwise incur through climate change.

GHG (greenhouse gas) emission reduction targets

With the level of emissions in FY2019 as a basis, the target was to reduce the level of GHG emissions resulting from electricity use in our Tokyo head office by 1% per full time employee by FY2025. Since January 2021, the TEKKO BUILDING which houses our Tokyo head office, has been running on 100% renewable energy. As a result, theoretical GHG emissions came to zero and our target was achieved in FY2021. The Company is currently broadening the scope of its calculations and making aggregations, and at the same time, implementing a study to re-establish the target figures.

GHG (greenhouse gas) emission data

Please refer to the "ESG Data" in the Sutanability initiatives page for GHG emission and energy consumption data.

Consideration for the environment of our planet

Reduction of burdens on the environment

Our employees continuously strive to reduce burdens on the environment and lower energy consumption through the use of public transport, use of IT and reduction of unnecessary printed materials.

The Company has a system necessitating the use of the individual’s ID card when printing documents, which captures information on how much each individual uses printers. In its M&A process, the Company has introduced electronic contracts and promoted paperless work in expense settlement and invoice issuance to help reduce paper resources and contribute to enhancing information security.

In addition, the Group is working to increase the number of M&As that can contribute towards reducing the environmental burden on society as a whole. Through the investment trust offered by Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., we made ESG investments in two ESG funds operated by BlackRock. In 2021, we made an ESG investment of ¥100 million in Climate Finance Partnership, which is a public-private infrastructure fund for climate change in emerging countries. The Company’s investments avoided approximately 8,531 tons of CO2 emission (as of December 31, 2023). In 2022, we made an ESG investment of ¥100 million in Decarbonization Partners Strategy which is a venture capital fund for decarbonization-related companies. We intend to increase the effects of reduction of greenhouse gases through business expansion of our portfolio companies by investing in growing companies with superior technology.